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<blockquote data-quote="curiousbrain" data-source="post: 825305" data-attributes="member: 31608"><p>I find this rather provoking, considering some of my thoughts as of late (the past months or so). I have been reconsidering how I view the purpose of federal taxes; more specifically, I've been thinking about the dual meanings of taxation. Which is to say that in theory, taxes provide revenue and all that of the conventional wisdom; however, operationally speaking (or, in practice, which is somewhat clearer), federal governments have unlimited funds available to them - at which point, taxes are no longer required to generate revenue.</p><p></p><p>I've been pondering that taxes then become a form of regulation, which the federal government can use to throttle different sectors of the economy. A sector in a slump (e.g. manufacturing) could be given large tax incentives to relocate/start anew in this country, while firmly established sectors (e.g. financial firms) could be taxed at "normal" rates (relative to the rest of the economy).</p><p></p><p>Several problems with this approach - fundamentally, though, if money was really infinite then there arises an issue with inflation as viewed in the context of the quantity of money.</p><p></p><p>I hasten to add that these thoughts are limited to federal taxation, as state/municipal taxation is used for revenue.</p><p></p><p>I ran across Schumpeter a day or so ago when solidifying my thoughts in some earlier posts, although probably did not give him the proper amount of attention; I may revisit it today.</p></blockquote><p></p>
[QUOTE="curiousbrain, post: 825305, member: 31608"] I find this rather provoking, considering some of my thoughts as of late (the past months or so). I have been reconsidering how I view the purpose of federal taxes; more specifically, I've been thinking about the dual meanings of taxation. Which is to say that in theory, taxes provide revenue and all that of the conventional wisdom; however, operationally speaking (or, in practice, which is somewhat clearer), federal governments have unlimited funds available to them - at which point, taxes are no longer required to generate revenue. I've been pondering that taxes then become a form of regulation, which the federal government can use to throttle different sectors of the economy. A sector in a slump (e.g. manufacturing) could be given large tax incentives to relocate/start anew in this country, while firmly established sectors (e.g. financial firms) could be taxed at "normal" rates (relative to the rest of the economy). Several problems with this approach - fundamentally, though, if money was really infinite then there arises an issue with inflation as viewed in the context of the quantity of money. I hasten to add that these thoughts are limited to federal taxation, as state/municipal taxation is used for revenue. I ran across Schumpeter a day or so ago when solidifying my thoughts in some earlier posts, although probably did not give him the proper amount of attention; I may revisit it today. [/QUOTE]
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